Indonesia bans palm oil exportsEdible oil prices expected to rise further with effect from Thursday packaged goods in India. Palm oil is used as a raw material for various industries to manufacture products ranging from soap, shampoo, noodles and biscuits to chocolate. A reduction in the supply of palm oil will raise its prices, which, in turn, will increase the input cost and hence the prices of these products.
India is the largest importer of edible oils in the world and the largest importer of palm oil and soybean oil. India imports more than 13.5 million tonnes of edible oil every year. Of this, 8 to 85 lakh tonnes (about 63 per cent) is palm oil. Now, about 45 percent comes from Indonesia and the rest from neighboring Malaysia. India imports around 4 million tonnes of palm oil from Indonesia every year.
The ban was announced last Friday (April 22) and palm oil prices rose nearly 5 per cent during the next weekend, anticipating a reduction in the coming months.
Santosh Meena, Head (Research) Swastika Investmart said, “Palm oil and its derivatives are used in the production of many items like soaps, shampoos, biscuits and noodles for daily consumption. This is HUL, Nestle, Britannia, Godrej Consumer Products Ltd., Marico Ltd. etc. Due to higher prices, packaged food product manufacturers, soap makers and other personal care manufacturers will have no other option but to increase the prices, and thus reduce their quantity. influencing.”
On the challenges after the ban, Mayank Shah, Senior Category Head, Parle Products, has said that it is not just for food companies but for FMCG (fast-moving consumer goods) firms as there are many other players beyond food firms, including Soap manufacturing companies are also included. and other things. “It’s going to be very challenging.”
Analysts at brokerage firm Jefferies said in a report that the ban would add to the pressure and become a major concern for HUL, GCPL, Britannia and Nestle. According to a Bloomberg report quoting James Fry, chairman of commodity consultancy LMC International, “Indonesia’s decision affects not only the availability of palm oil but vegetable oil around the world.”
Solvent Extractors Association of India (SEA) President Atul Chaturvedi called the move unexpected and said the ban would hurt customers in India as well as globally. “This will have a serious impact on our domestic market as half of our palm oil imports come from Indonesia and no one can fill this void.”
“While this move to impose sanctions on Indonesia’s RBD olein may create short-term price volatility, it will be favorable for Indian edible oil refiners as it will increase the share of crude palm oil imports in the country. The Indian government attaches more importance to crude palm oil imports than refined oils to support the local refining industry. Hence, the duty difference between crude and refined oil has also been kept at 8.25 per cent,” CRISIL Director of Research Pushan Sharma, reports TOI.
Indonesia, the world’s largest producer of palm oil, clarified that the export ban announced late last week would not apply to crude palm oil, but would only cover refined, bleached, odorless (RBD) palm olein.
of the country retail inflation The Consumer Price Index (CPI) basis rose to a 17-month high of 6.95 per cent in March, with a jump of 19 per cent led by edible oils.
read all Breaking News , today’s fresh news And IPL 2022 Live Updates Here.